the credit report disclosure clearly indicates that our score took a hit because we don’t carry a balance.

Are you paying your cards off before the statement cycle ends, resulting in your statement reading $0 every month? “No recent revolving balances” means that, as far as the credit reporting agencies know, you haven’t been using your card at all for 3+ months (emphasis added)^[1]:

“No recent revolving balances”—another way to say your credit cards are all paid off—sometimes appears as a FICO® Score risk factor. To be included in a credit score calculation, accounts need to show activity over time. By making a small purchase each month and then paying the balance in full, you will demonstrate that you are a good credit risk. The balance on your billing statement is what is usually shown in your credit report. Even though you’ve paid the balance in full, your credit report would show the balance, indicating activity in your account and helping your score.

You should let the statement cycle end with the balance of whatever you used it for, and then pay it off, anytime between that day and your due date. As long as you pay it off no later than your due date, you’ll still pay no interest, but paying it off before the statement ends prevents the agencies from even realizing that you used the card at all, because the agencies can’t see your actual credit card usage activity. They see only:

• statement balance
• (if it’s nonzero) payment status
  • ‘did you pay at least the minimum?’
  • ‘did you pay on time/by the due date?’

I also have a plus 800 credit score, but it would be higher if I made a habit of paying the bank lots of interest income.

No, it wouldn’t. Interest paid is not a factor at all—the credit reporting agencies literally have no way of knowing what portion, if any, of your statement balance is interest, they’re only provided the bottom line total statement balance.

Also, if you’re over 750, any further increase is ‘gravy’ anyway, almost no lender has a tier higher than that. The highest ‘breakpoint’ I’ve ever seen is 780. Even if what you said was accurate, ‘I’m over 800 but it could be higher’ is a distinction without a difference.

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1. And this is only an ‘adverse effect’ insofar as, after that amount of time, you start to be considered similarly someone who doesn’t have those credit cards at all, since as far as they know, you’re using them the same amount as such a person, lol. ↩︎